Western and Eastern Europe is forecast to see minimal or negative GDP growth in the 2nd Q of 2022.
Russia is a major supplier of oil to Europe. It seems that European countries are in a tough spot.
The Russian invasion of Ukraine has been a wake-up call; it has revealed the susceptibilities of European energy sources.
The invasion also triggered Germany to stop the agreement on the contentious Nord Stream 2 gas pipeline from Russia.
In just 4 weeks, 5 + million Ukrainians, more than 10% of Ukraine’s 44 million population, have fled the country. This number could increase substantially in the next couple of weeks. Countries bordering or close to Ukraine, such as Poland, Moldova, Turkey, Bulgaria, Romania, and Slovakia could also face serious economic challenges with hundreds of thousands of refugees fleeing Ukraine.
European economies and their construction sector will face a challenging period in the months ahead.
The average cost of a liter of petrol in the UK has risen by more than 25% in the last 10 days. Will fuel prices keep escalating? Probably. Other European countries have experienced similar increases.
Escalation is surging in some northern European countries. Estonia, Germany, Latvia, Lithuania, Russia, and Poland are seeing rates in November ranging between 7% & 10% and energy prices have risen by as much as 25% in the last 6 months.
The ongoing Brexit trade “spat” will continue to impact European construction until it is resolved. The UK and the European Union continue to squabble over the terms and conditions of the so-called agreement. Some industry experts believe the UK will benefit at the expense of both France and Germany.
The COVID-19 virus issue appears to be improving, however, there remains the possibility of new COVID strains appearing.
The ongoing Russia – Ukraine hostilities will, of course, negatively impact the construction sectors of Germany, France, Italy, Spain, and the UK. The latest thinking is that these construction sectors will hopefully start to see an improvement in the 2nd half of 2022, if and when the Russia – Ukraine war can be concluded.
In a sign that the Russia – Ukraine conflict is really dangerous, Scandinavian historically-neutral countries, Sweden and Finland, are both now contemplating/exploring joining the NATO military pact.
The European economies and construction sectors could be severely impacted by the ongoing war in Ukraine. It is difficult to forecast the long-term impact on the European economies.